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Mar 29, 2018
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Reason will prevail in Brexit negotiations, Next boss says

Reuters API
Mar 29, 2018

Prime Minister Theresa May will likely win a Brexit deal that suits both sides of her warring party and the EU because the alternative does not bear thinking about, the boss of one of Britain's biggest retailers and a prominent Leave supporter said.

Exactly one year before Britain's formal withdrawal from the EU on March 29, 2019, Next Chief Executive Simon Wolfson said the prospect of achieving consensus within the Conservative Party and between the EU and the British government was growing.

Wolfson has been CEO of clothing retailer Next for 17 years and as a Conservative peer sits in the upper house of Britain's parliament, giving him an insight into the workings of the government and the impact its policies have on consumers.

"The alternative to a deal you don't like is a situation that's much worse, and that is ultimately likely to keep everyone in check," Wolfson told Reuters in an interview at Next's London office.

"If you take an extreme Remain view and say: 'I’m just going to wreck the deal', the alternative is we drop out with no deal at all. Even the most die hard Remainer would prefer to have some form of agreement with the EU.

"Equally if you're a die hard Leaver and say: 'I'm not going to accept anything less than 100 percent independence with 100 percent access to all of the benefits of the EU,' the alternative is the government saying: 'I'm going to ignore you because that's not possible.'"

"Ultimately we have to have a degree of faith in the process of rational debate."

Last week, EU leaders approved a 21-month transition period to help business adapt after Brexit, kicking off possibly the hardest part of the negotiation to agree the bloc's future trading relationship with Britain.

However, until a transition deal is legally ratified, probably later this year, many companies are having to plan for the worst and assume that the UK will crash out of the EU in March 2019.


Wolfson said the transition period was sensible, particularly as there was "absolutely no way" the detail of Brexit could be agreed by March 2019.

"The idea of agreeing Heads of Terms (a broad outline of the deal) before going into detail makes complete sense, because in many ways the principles are the hard things to agree to politically and the details are the hard things to agree to practically," he said.

Next trades from over 500 stores in the UK and Ireland and around 200 stores overseas. It imports 15-20 percent of the products it sells from the EU, with the rest from Asia. It sells into 70 countries and employs 45,000 in Britain.
Wolfson, lauded by analysts for his reading of the economic runes, said his ideal scenario was that by end-March 2019 there was UK-EU agreement on no tariffs on goods, an agreement for expedited customs and expedited movement of people, and a recognition that there will be some form of borders.

"Already you can see that on goods there is pretty much broad agreement that there shouldn't be tariffs," he said.
Wolfson, whose great grandfather settled in Glasgow in the late 1890s after fleeing the persecution of Jews on the Polish/Lithuanian border, said that while he recognised the value of immigration there needed to be some controls.

"People think that Brexit was somehow the result of populism, actually in UK politics Brexit has been the antidote to populism and extremism – Brexit has wiped out UKIP," he said, in reference to the pro-Brexit party.
"All that horrible talk about immigration has pretty much disappeared."


Wolfson also stressed the Brexit deal is not going to be the make or break of Britain's economy.

"It's important but it's not the sum total of things that will make a difference to the British economy over the next 20 years.

"Things like our approach to planning, infrastructure, transport, the free market and regulation will make as much, if not more, difference," he said.

Wolfson said May had done a good job as a consensus builder, conciliator and honest broker with Europe. But he is not convinced she can go on as leader beyond Brexit.

"I'm not saying that she's not capable of leading us into the next election, but the jury's out."

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